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BP in Alaska: Moving the oil – pipeline challenges
Frank Baker For Petroleum News
Designing a pipeline that would transport Prudhoe Bay oil from Alaska’s northern coast to its ice-free port of Valdez on Alaska’s southern coast was an unprecedented engineering challenge. Three basic types of mainline pipe construction would be used along different parts of the 800-mile route to address different soil conditions: 1. buried in a conventional manner; 2. buried with special systems to reduce or prevent heat transfer to the ground; and, 3. above the surface mounted on support platforms.
The 48-inch-diameter mainline pipe was delivered to Alaska in the early 1970s from three companies in Japan — Sumitomo Metal Industries, Yawata Iron and Steel, and Nippon Kokan. The 69,000 lengths of pipe were stockpiled at large sites in Valdez, Fairbanks and Prudhoe Bay. The pipe cost about $120 million.
The pipe had to be strong with wall thicknesses of 0.462 and 0.562 inches and specified minimum yield strengths of 60,000-70,000 pounds per square inch. These specifications would meet or exceed the requirements for safety and special low temperature considerations as well as all U.S. government and American Petroleum Institute standards.
The pipeline system had to be built to withstand the combined stresses of internal pressure and of thermal, bending and seismic forces.
At river crossings and in certain flood plains, it required anti-corrosive coating and an outside layer of concrete to anchor it to the stream bottoms.
Buried sections had to be coated and cathodically protected with zinc anodes to prevent chemical and electrolytic corrosion, while above-ground sections (about half the line) required thermal insulation to slow the drop in oil temperature in the event of a pipeline shutdown.
The size and scale of the project was daunting. The 800-mile pipeline would cross three mountain ranges (the highest point at 4,739 feet), 800 streams and rivers, and the Denali fault, an area known to be seismically active.
It would be built in both continuous permafrost and highly unstable discontinuous permafrost (that thaws and melts each year).
Geotechnical, geological, civil and Arctic engineering, stress analysis, thermal engineering, agronomics, hydraulics, mechanical and welding engineering were all required. This wide-ranging array of engineering disciplines produced the most detailed design of any pipeline ever constructed. Also significant was that it was constructed within a short period of time — a mere three years.
Thousands of borehole core samples were analyzed. Seismic experts at Menlo Park, Calif., reviewed reams of data to assess earthquake risk. Extensive stress analyses on the pipe were conducted.
Legal, environmental hurdles Since Sohio had no large oil production organization of its own, BP agreed to manage construction and development of the Prudhoe Bay field through a new subsidiary, BP Alaska Inc.
Sohio would look after its own interest in the proposed trans-Alaska pipeline in helping supervise the colossal project. It was also responsible for major expansion of the Sohio tanker fleet to accommodate the expected flow of oil from Alaska.
Unlike many American oil companies working in Alaska, BP had no U.S. producing operation from which to draw experienced staff. Some BP management and technical staff were brought in from the U.K. and the Middle East, and Sohio was able to offer some experienced staff from its small oil-production operations in Oklahoma. At the same time, BP launched an ambitious recruiting effort for new U.S. staff.
By 1969, BP had about 35 people headquartered in Anchorage at its Fireweed Lane office. Among them was John Browne, a young physicist and petroleum engineer. Browne would quickly ascend to senior management and would eventually become the company’s chief executive officer and main board director, based in London. Browne retired in 2008.
By 1970, BP’s Alaska workforce was about 150, and the company was quick to establish its name throughout the state as it began adding staff to meet the challenges ahead. Despite the fact that federal approval of the 800-mile pipeline faced opposition in Washington, D.C., industry planners were confident that a go-ahead would be secured, so they moved forward.
As BP, ARCO and Exxon began the early phases of oil field development and planning of an oil transportation system, major issues were looming on the nation’s horizon — most notably, Alaska Native Claims.
Alaska Natives, the Inupiat and Yupik Eskimos in northern and western Alaska, Athabascan Indians in the Interior, Aleuts in Southwest and Southcentral Alaska, and Tlingit and Haida people in the Southeast panhandle came forward with claims to Alaska lands which they had traditionally used. They argued that these claims were recognized by the U.S. treaty with Czarist Russia when Alaska was purchased in 1867, and then reaffirmed by the U.S. Congress in 1884.
In 1884 Congress had reserved to itself the authority to settle the land claims. But the issue languished for decades — through the years of the Gold Rush, the settlement of some of Alaska by non-Natives, World War II and finally, creation of the state of Alaska.
The Alaska Federation of Natives (AFN) had formed only in 1966, bringing all of Alaska’s diverse Alaska Native groups together. AFN’s ability to persuade the U.S. Secretary of Interior to halt grants of land under the 1958 Alaska Statehood Act halted the proposed pipeline project.
A leasing freeze, made official in January 1969, stopped the state from leasing the oil companies a right of way for the pipeline until the question of Native rights was settled. Sixty-six Natives living on its proposed route, from Prudhoe Bay to Valdez, obtained an injunction in Washington against the pipeline being laid across their land without their consent.
Getting clear title to lands and a right of way along which the pipeline would be built was an absolute necessity. A congressional act to settle the long-standing Native claims issue was needed before the federal government could grant a right of way for the project. This brought the interests of Alaska Native people, who desired a land claims settlement; BP and the other companies involved in TAPS; and the State of Alaska, which needed the pipeline to be built, into a historic alliance to get a land claims bill through Congress.
Moving land claims legislation Alyeska Pipeline Service Co.’s first chairman, Edward L. Patton, as well as Hugh Gallagher, BP’s lobbyist in Washington, D.C., were instrumental in helping move Native Land Claims legislation. The two worked to get oil industry backing for the claims settlement bill, and the support of congressional delegations from other oil-producing U.S. states. John Gore, formerly a senior group executive in BP’s corporate office in London, also played a pivotal role in Washington, D.C., in facilitating the claims act.
Success came in December 1971, when Congress approved the Alaska Native Claims Settlement Act, ANCSA, granting Alaska’s indigenous population more than 40 million acres and $962 million in settlement of their hereditary claims.
Each individual village could be incorporated within one of the 12 regional Native corporations the act created and a 13th corporation was to be set up for Alaska Natives living outside the state. ANCSA had provided that $500 million — half of the cash settlement for Alaska lands that would not be returned to Native ownership — would be paid to the new Native regional and village corporations from a temporary royalty override on Prudhoe Bay oil production. To get the money, the pipeline had to be built so that the oil field could be put into production.
Willie Hensley, a prominent Alaska Native leader, walked the halls of Congress in 1973, pushing for the pipeline legislation to be passed. Hensley and other Native leaders were able to see influential eastern senators and congressmen, such as Sen. Edward Kennedy of Massachusetts, who was not ordinarily receptive to oil industry interests. Hensley and the others also proposed that special Native-hire and training commitments be included in the act, which Congress did.
The land freeze was lifted, and ANCSA was signed into law by President Nixon Dec. 18, 1971.
Environment takes center stage Running parallel to the Native claims issue was a growing national concern about how oil development would affect Alaska’s environment and wildlife. Citing the National Environmental Policy Act of 1970, newly formed environmental organizations such as the Friends of the Earth, the Environmental Defense Fund and the Wilderness Society, won a federal injunction against the right-of-way permit in April of that year. They claimed the 200-page Environmental Impact Statement (EIS) for the trans-Alaska oil pipeline did not adequately address the pipeline’s potential environmental impacts.
In 1972 a new EIS was drafted. It was encyclopedic in content — its volumes towering seven feet when stacked on top of one another.
The impact statement was only one delay among many. Environmentalists also unearthed a little-known provision in a 1920 federal minerals law that limited the amount of right of way that could be granted on federal land. The limit, unless changed, could have blocked the pipeline and the 360-mile gravel haul road that parallels it (now the James Dalton Highway) from the Yukon River to the North Slope.
Charlie Elder, a retired BP executive (deceased), played a key role in helping secure a right-of-way permit.
“There was a bill introduced in Congress that cured the right-of-way matter,” Elder recalled. “There would have been no problem getting it passed, but unfortunately, just about then, in addition to the environmental impact stuff, the word got around from somewhere that we were going to export oil to Japan. It was 1972-73, and the nation was experiencing an energy shortage because of the Arab oil embargo. There were concerns by folks in the Midwest.”
After beating back Midwest efforts to delay the project in order to explore a Canadian route, pipeline proponents gambled and backed Sen. Mike Gravel and Sen. Ted Stevens’ amendment that would remove the right-of-way hang-up. It was known as the “no more” rider, which said in effect, that enough was enough on debate and lawsuits. In the national interest, work on the pipeline should proceed immediately.
“That amendment cost us some votes,” Elder said. “A lot of purists, particularly those folks who were lawyers, felt that the amendment removed due process. We were up all hours of the night among ourselves saying, ‘Is it smart to leave that in or take the chance and have no more lawsuits?’ I guess in retrospect, we were smart.”
The vote for the pipeline bill limiting any further judicial review of the project tied 49-49 on the U.S. Senate floor, with Vice President Spiro Agnew breaking the tie in favor of the amendment.
The pipeline authorization act was passed by both the House of Representatives and Senate. On Nov. 16, 1973, President Nixon signed it into law. The primary federal right-of-way permit for construction was signed by Secretary of Interior Rogers Morton on Jan. 23, 1974. After years of delay, North America’s largest privately funded project — the trans-Alaska oil pipeline — was finally under way.
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